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Pursuant to a congressional request, GAO reviewed the United Mine Workers of America (UMWA) Combined Benefit Fund, focusing on: (1) the status of the Fund's financial position and its financing mechanism; (2) the impact of major court decisions on the assignment of beneficiaries; and (3) significant litigation and its related costs.

GAO noted that: (1) the Fund has been experiencing financial difficulties due to rising costs and a financing mechanism that has been negatively affected by recent court decisions; (2) according to the Fund's September 30, 1999, audited financial statements, the Fund had a cumulative deficit of $12.2 million; (3) the Fund's actuary estimates that the cumulative operating deficit will increase to approximately $513 million by 2008; (4) in addition, the actuarial projection includes borrowing costs of $101 million during the same time frame, which results in a total deficit of $614 million; (5) the Fund is involved in extensive litigation arising from the Coal Act and normal business operations; (6) Fund officials classified their significant litigation into seven major categories: (a) constitutional cases; (b) Dixie Fuel court cases; (c) companies challenging assessments; (d) premium rate cases; (e) bankruptcy cases; (f) successorship cases; and (g) Evergreen cases; (7) Eastern Enterprises v. Apfel (1998) and Dixie Fuel Company v. Social Security Administration (1999) are two of the significant cases that have affected or may affect the assignment of beneficiaries; (8) Eastern resulted in approximately 8,000 beneficiary reassignments; (9) Dixie Fuel, which has not yet been implemented, could potentially result in the reassignment of 10,000 beneficiaries; and (10) the Fund has incurred legal costs of over $11 million for all significant cases since its inception.